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India may be a middle-income country, but that doesn't make it wealthy India may be a middle-income country, but that doesn't make it wealthy
(2 months later)
Last month, I gave evidence to the UK's House of Commons select committee inquiry on the future of UK development co-operation. A range of issues were discussed, but three misunderstandings stood out.Last month, I gave evidence to the UK's House of Commons select committee inquiry on the future of UK development co-operation. A range of issues were discussed, but three misunderstandings stood out.
First, middle-income countries are not "rich". That includes India and any other country with an average daily income of just over $3. It would seem that the term "middle income" is causing confusion.First, middle-income countries are not "rich". That includes India and any other country with an average daily income of just over $3. It would seem that the term "middle income" is causing confusion.
It is sensible to make the case that the UK has to prioritise its scarce resources, and should therefore focus on the very poorest countries. But this is an assessment of the relative rather than absolute needs of possible aid recipients. Some countries may be less poor, but that does not make them affluent.It is sensible to make the case that the UK has to prioritise its scarce resources, and should therefore focus on the very poorest countries. But this is an assessment of the relative rather than absolute needs of possible aid recipients. Some countries may be less poor, but that does not make them affluent.
To suggest that India is "wealthy enough to deal with its own problems" and "no longer needs aid" – comments that are quite common – is ridiculous, verging on inhumane. The country has grown in recent years, and has crossed the arbitrary and increasingly unhelpful "middle-income" threshold laid down by the World Bank. But the idea that India's meagre increases in human development are cause for wealthy countries to pack up and concern themselves with other things implies an incredibly stingy understanding of poverty. One in three of the world's malnourished children lives in India.To suggest that India is "wealthy enough to deal with its own problems" and "no longer needs aid" – comments that are quite common – is ridiculous, verging on inhumane. The country has grown in recent years, and has crossed the arbitrary and increasingly unhelpful "middle-income" threshold laid down by the World Bank. But the idea that India's meagre increases in human development are cause for wealthy countries to pack up and concern themselves with other things implies an incredibly stingy understanding of poverty. One in three of the world's malnourished children lives in India.
Unfortunately, we have been enticed into thinking in this way because the $1 and $2 a day poverty lines are so ingrained in our analysis. We think people above these lines are "non-poor"; in reality, their destitution is just slightly less extreme.Unfortunately, we have been enticed into thinking in this way because the $1 and $2 a day poverty lines are so ingrained in our analysis. We think people above these lines are "non-poor"; in reality, their destitution is just slightly less extreme.
Some analyses suggest people living on more than $2 a day should be described as "middle class", while even the more common $10 a day definition of the middle class is pretty hard to swallow – it's just $3,650 a year.Some analyses suggest people living on more than $2 a day should be described as "middle class", while even the more common $10 a day definition of the middle class is pretty hard to swallow – it's just $3,650 a year.
So devising arguments about why not to give aid to India is one thing, saying it's a rich country quite another.So devising arguments about why not to give aid to India is one thing, saying it's a rich country quite another.
The second provocative issue addressed by the inquiry concerned trade-offs in development priorities. Politicians routinely promise more than they deliver, not least in the world of development.The second provocative issue addressed by the inquiry concerned trade-offs in development priorities. Politicians routinely promise more than they deliver, not least in the world of development.
Virtuous circles, whereby investment in health and roads leads to better educational outcomes – and more women's empowerment, feeding back into health – doubtless exist. But equally often, governments in developing countries, just like their counterparts in developed countries, need to make hard decisions about what to fund and where to reduce funding.Virtuous circles, whereby investment in health and roads leads to better educational outcomes – and more women's empowerment, feeding back into health – doubtless exist. But equally often, governments in developing countries, just like their counterparts in developed countries, need to make hard decisions about what to fund and where to reduce funding.
Take primary education, understandably the focus of much aid spending over the past two decades. Some leaders – including, notably, Meles Zenawi of Ethiopia – pushed back at this donor strategy, insisting that investment in secondary and tertiary education would produce the educated engineers and professionals necessary to reduce dependence on external support.Take primary education, understandably the focus of much aid spending over the past two decades. Some leaders – including, notably, Meles Zenawi of Ethiopia – pushed back at this donor strategy, insisting that investment in secondary and tertiary education would produce the educated engineers and professionals necessary to reduce dependence on external support.
But can you really reduce primary education funding in favour of universities? Or focus spending on hi-tech industry to the detriment of investments in small-scale farmers? Getting the balance right is the day-to-day reality of politics and power, just as it is in developed countries; refusing to admit there might be trade-offs is reductive.But can you really reduce primary education funding in favour of universities? Or focus spending on hi-tech industry to the detriment of investments in small-scale farmers? Getting the balance right is the day-to-day reality of politics and power, just as it is in developed countries; refusing to admit there might be trade-offs is reductive.
Third, there is a logical fallacy common among elected representatives that, because a particular analysis won't play well to voters, it is an intellectually weak analysis. MPs struggling to defend aid spending at all have no wish to try to explain aid to big countries like India, a nuclear power, or Brazil, increasingly a competitor in the global market. Nor, if they ever got into a detailed discussion, would they appreciate having to defend to voters investments in university scholarships and hi-tech processing equipment – easier to show pictures of poor kids.Third, there is a logical fallacy common among elected representatives that, because a particular analysis won't play well to voters, it is an intellectually weak analysis. MPs struggling to defend aid spending at all have no wish to try to explain aid to big countries like India, a nuclear power, or Brazil, increasingly a competitor in the global market. Nor, if they ever got into a detailed discussion, would they appreciate having to defend to voters investments in university scholarships and hi-tech processing equipment – easier to show pictures of poor kids.
But even if something is hard to sell on the doorstep, it does not make it untrue, it simply means it's hard to sell on the doorstep. Differentiating between analysis and strategy is crucial. So when the final question we were asked was about the target to spend 0.7% of GNI on aid, I said that while some try to justify this goal on technical grounds (by suggesting that 0.7% of rich country GDP – no more, no less – is somehow the mathematically correct amount to be spending overseas), it has no research justification. It is a tool politicians use and, as such, is an issue on which the panel of MPs were best placed to opine.But even if something is hard to sell on the doorstep, it does not make it untrue, it simply means it's hard to sell on the doorstep. Differentiating between analysis and strategy is crucial. So when the final question we were asked was about the target to spend 0.7% of GNI on aid, I said that while some try to justify this goal on technical grounds (by suggesting that 0.7% of rich country GDP – no more, no less – is somehow the mathematically correct amount to be spending overseas), it has no research justification. It is a tool politicians use and, as such, is an issue on which the panel of MPs were best placed to opine.
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